The WiseTech Global Ltd (ASX:WTC) share price has been a strong performer over the last month. Can its shares continue to rise?
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The WiseTech Global Ltd (ASX: WTC) share price has been a strong performer in recent weeks.
Since this time in March, the logistics solutions provider’s shares have risen by a solid 12.5%.
This compares favourably to a 4.5% gain by the S&P/ASX 200 Index (ASX: XJO) over the same period.
Why is the WiseTech Global share price on form?
The catalyst for the strong gain by the WiseTech Global share price appears to have been a broker note out of Macquarie Group Ltd (ASX: MQG) last month.
That note reveals that the broker upgraded its shares to an outperform rating with a $33.00 price target.
Macquarie made the move on the belief that the worst of the pandemic is now behind the company and upgraded its earnings forecasts to reflect this.
With the WiseTech Global share price fetching $30.75 today, this implies potential upside of approximately 7.5% over the next 12 months.
What are other brokers saying?
This morning, Bell Potter gave its verdict on the WiseTech Global share price.
According to the note, the broker has held firm with its hold rating and lifted its price target to $31.50.
Bell Potter commented: “We believe there is upside risk to WiseTech’s FY21 revenue and EBITDA guidance for two key reasons: 1. Global trade volumes continue to rebound strongly post the impacts of the US-China trade war in 1HFY20 and COVID in 2HFY20; and 2. The AUD/USD exchange rate has averaged 0.77 so far this half whereas the guidance assumes an average of 0.79 in 2HFY21.”
“We also note the continued lack of any M&A activity this half which supports a strong EBITDA margin in 2HFY21 similar or better than the EBITDA margin in 1HFY21,” it added.
In addition, the broker believes that the resumption of the share sell down by its CEO is actually a positive.
The broker explained: “We also believe the flagged recommencement of Richard White’s sell down implies the company is at least on track to achieve its guidance as we doubt the CEO would be selling if the result was not going to be good.”
However, due to its valuation, it isn’t enough for the broker to upgrade its rating to buy just yet.
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James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of WiseTech Global. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.